VMware weighs in on digital transformation in financial services

Financial Services Blog - VMwareI rarely go to the bank anymore, and I’ll bet you rarely do, either. If I’m right about you, we’re part of a growing trend among financial services customers. We want more from our financial institutions, and we want it delivered digitally. Have to pay a utility bill? We schedule it for electronic transfer online. Need to pay the babysitter or the electrician? We send a peer-to-peer payment. Want to deposit a check from your great-aunt, the only person you still know who writes checks? We upload a photo from our smartphones for mobile deposit.

All of these technological advances mean financial institutions are serving customers who expect far more with far less human interaction. The primary way for organizations in this landscape to win customers, engage with them and ensure their loyalty is with anywhere, anytime, any-device access that is rock-solid reliable.

This question of engagement is not trivial. Fully engaged customers represent 37 percent more revenue to financial services companies. Unfortunately, the generation that appears to be the least engaged with the industry will have the biggest metaphorical wallet in the coming years.

According to a recent VMware infographic titled “Banking on Digital Transformation,” only 23 percent of millennials are fully engaged with their banking institutions, and 37 percent of millennials expect banks won’t even be necessary within the next few years.

So, what is the financial services industry doing to meet changing customer preferences (while fighting off non-traditional upstarts)? Well, if you look at where IT investments are going, maybe not enough. The same VMware infographic notes that the global financial services market spent $459 billion in 2015 on IT – but only 20 percent of that money went to customer experience.

Among those same millennials who are banking digitally are many young adults who are working at financial institutions. They also want always-on applications and the free-range status that comes with mobile technology.

These generational, market and technological demands are driving financial services transformation, perhaps as much as any regulatory or compliance mandates. As banks and other institutions look to maintain customer engagement – and their competitive standing – they’ll need to consider how to secure digital workspaces for customers and employees alike, while opening the door to cloud apps and tearing down barriers to mobility.

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Drew Woods
Key Information Systems, Inc.